Hellman & Friedman’s chairman and co-founder Warren Hellman talks at length about life at the firm, including some interesting things about the company’s mens rooms.

Via PEHub, a video of Hellman’s speech at the Stanford University’s Rock Center for Corporate Governance, which took place on October 10, 2007, is online.

Some notes from the video are below:

- Hellman was the youngest partner at Lehman Brothers (age of 28)
- The company names men’s room stalls after deals gone bad (but non apparently in the women’s rooms, which the ladies are upset about) - Hellman & Friedman has achieved a 30% IRR over its 30 year track record
- Hellman & Friedman’s partners have taken equity hits “only twice”
- Did I hear “horse tattooed?”
- They invest on a “long-term” horizon (defined as 3-7 years)
- We have one line of business, and that’s private equity; that makes it easier than having a hedge fund, a mezz fund etc
- It’s all about “skin in the game” (yes, it was said) — $400MM in Fund VI, about 5% of fund is partner money; if the “fund prospers, we prosper”
- Firm hasn’t haven’t lost money in the last 10 years
- Once every quarter, they have a 7-8 hour investment committee meeting where they review all investments
- Portfolio companies are not charged any fees
- “None of our younger people are incentivized to get a transaction done; they’re incentivized to make good investments”
- “We’re not going to go public”
- “I don’t want to be listed … in Forbes anything”
- EAs, accountants get to participate in an investment pool — get none of the downside and some of the upside
- Rest of the investment staff gets there’s both downside and upside
- Junior people — “feel part of … investment activities from the beginning … they have a lot riding on how the partnership does”
- Never had a splinter group leave … or a younger MD
- No one allowed to contribute to political campaign of anyone who has influence over/appoint people on retirement fund boards
- How they raised the billions for their fund: took 3.5 months to raise $8BN+ ($300MM is their smallest investment) — could have raised a lot more than $8.5BN. They try to raise what they think they can invest.
- “We’re not in the testosterone business … $20BN has a lot to do with testosterone” (describing larger funds raised by others)
- Ready for the shakeout … H&F has been underleveraged if anything
- Reason people have gone public is a five letter word beginning with “g” and ending with “d”
- Patrick Healy who runs London office owns more of the firm than Hellman — into recycling ownership